It’s selling the thing it should keep and keeping the thing it should sell, making two wrong decisions because the government needs the money.

The Hydro One sale is carrying on in stages, one chunk at a time. The lottery disposal was scrapped last Friday when the Ontario Lottery and Gaming Corp. decided it couldn’t make enough bank off contracting it out.

It got plenty of interest, the agency reported, but “after a period of due diligence and consultation with globally-experienced proponents, OLG has determined that the selection of a single service provider would not provide increased value for the province.”

“The province and the government looks at its assets and tries to maximize its value in a way that benefits all Ontarians,” Finance Minister Charles Sousa explained to the legislature Monday morning, answering questions from New Democrat MPP Jagmeet Singh. “The process by which the OLG was proceeding recognized that there was more value to the province to have it in-house because of the way it functions.”

Mind you, a little later in the same exchange, Sousa used a slightly different line: “Ontario Lottery and Gaming’s modernization process is about providing service delivery. It’s not about privatizing the OLG.”

Sousa did say, plainly, that the driving consideration here is how much cash any particular move will bring in

In a strict technical sense, Sousa’s right: The OLG was never planning to “privatize” the lottery. It just set out find a private company that would run the lottery’s day-to-day operations, come up with new lotteries and market them, recommend large-scale changes to the lottery business, and make a profit doing so. In exchange, the private company would give the OLG some money. And the whole thing was scuttled because nobody would give the OLG enough money.

Singh was trying to get Sousa to say that the Liberal government has realized that privatizing public things is a bad idea, which of course the finance minister would not do. But he did say, plainly, that the driving consideration here is how much cash any particular move will bring in. The lottery has “more value to the province” in the OLG’s hands. Whereas “we are talking about broadening ownership of Hydro One for the benefit of the people of Ontario, recognizing the returns that we can make,” Sousa said.

Recognizing the returns that we can make.

There’s no principled reason for the government to run lotteries. It’s a long and profitable habit, obviously (worth $2.2 billion last year) but there’s no more reason why the state should have a monopoly on lotteries than it should have one on movies or food. Somebody ought to make sure lotteries are run according to their stated rules, sure, but it doesn’t take ownership to achieve that.

Lotto 6/49 and its cousins are a different branch of the gambling business from online casinos, where the state-run operation is consistently pantsed by offshore competitors, but it has the same problem. If it’s really easy to play and presented in a fun way, people will participate even though they know it’s statistically a bad deal, but lining up at a corner store to buy tickets was never all that much fun and it’s relatively less so now compared with, say, the downloadable game Candy Crush Saga, if you’re looking to spend a bunch of money on a casual amusement.

Now compare Hydro One, where there actually is a principled reason for the government to keep ownership and control. Nobody but Hydro One does what Hydro One does. We’re not going to have competing networks of high-voltage wires crisscrossing the province, linking generating stations and local distribution companies such as Hydro Ottawa via different routes. Certainly rural customers who get their electricity directly from Hydro One aren’t going to get multiple sets of wires to their houses. Even stubborn libertarians usually see the case for the government to be in charge of something if competition isn’t realistic.

Instead, we’re in the middle of selling a majority stake in Hydro One to private investors.

The provincial government will keep some important veto powers and a large minority stake, but this is explicitly about “unlocking” money in Hydro One shares, trading long-term operating profits for a short-term cash payoff that can be spent now. The bet is that the $9-billion windfall, divided between paying off provincial debt and building new infrastructure, will produce more long-term benefits than Hydro One’s perpetual profits. Ontario’s budget watchdog has pegged the lost income at $500 million a year by 2025, so that’s a lot of revenue to be made up, but it could work out.

Regardless, in the end we’ll end up with (1) a government-owned gambling business battling forever against a lot of competitors and (2) a largely privatized utility with none.

Patterson also plans to buy a new horse trailer, a silver Corvette and renovate her home with the winnings, but overall she doesn’t plan to change her life in any extreme way.

“We had a really nice life anyway, and this will change us of course, I am not going to say it won’t,” Patterson said shortly after a media conference ended in downtown Toronto. “But apart from doing a few things we want to do, I don’t think it is going to be all that different to be honest.”

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Patterson was presented her giant cheque by Wendy Montgomery, OLG’s vice-president of lottery, marketing and sales at the corporation’s prize centre in Toronto on Wednesday after walking down a red carpet and high-fiving OLG staff along the way. Patterson’s prize was one of two $60-million jackpots awarded on Wednesday, and officials were calling the $120-million payout the most ever handed in Canadian national lottery history. John Henry of Mississauga was the other winner. His ticket won for the Lotto Max draw on Christmas Day.

TORONTO — Ontario’s Lottery and Gaming Corp. failed to adequately consult municipalities before promising to increase revenues by building new casinos that it turned out cities don’t want, auditor general Bonnie Lysyk reported Monday.

“OLG included projected profits from those casinos without first confirming that new casinos would be accepted, would be considered, in certain municipalities,” said Lysyk. “In fact, large Ontario cities such as Toronto and Ottawa rejected OLG’s proposals for constructing new casinos.”

Lysyk issued a special report on OLG’s modernization plan that also criticized the agency and the Liberal government for the “abrupt cancellation” of a program that gave $347 million a year from slot machine revenues to horse racetracks.

“The profit estimates should have been more realistic, and the abrupt impact on the horse racing industry could have been mitigated had more people been consulted beforehand,” she said in the report.

OLG originally projected it could bring in an additional $4.6 billion in gaming profits between 2013 and 2018 through new casinos and other modernization efforts, a figure it has since revised downward by nearly half to $2.2 billion. However, that’s still too optimistic for the financial watchdog, who puts the figure at $1.8 billion, or about 60% less than the forecast.

The Progressive Conservatives said that means the Liberal government faces an even larger problem trying to eliminate an $11.3-billion deficit and balance the books on schedule by 2017-18.

“There’s a huge hole in the Liberals’ accounting due to OLG revenues,” said PC finance critic Vic Fedeli.

But Finance Minister Charles Sousa said he’d already taken the lower-than-expected revenue hike from OLG into consideration in last year’s budget, and then lowered the figure even more in last fall’s economic statement.

The agency is expected to turn over $2 billion to the province this year, and had hoped to increase that by $1.3 billion more each year by 2018, but Sousa put a much lower revenue figure in his budget.

“In the provisions of the budget at the time, we lowered them — we didn’t make it as high in what we put forward in our budget projections, and since then we’ve revised them again, and I’ve since revised them even lower to $600 million,” he said.

OLG also overstated the number of jobs that would come from its modernization plan by projecting 2,300 new positions would be created, said Lysyk, who warned there would likely be job losses in the end.

“OLG projected that all of this expansion was to have created 2,300 net new gaming jobs in the province,” she said. “With the cancellation of a GTA casino factored out of this projection, there may be a loss of 1,000 net new gaming jobs.”

In addition, OLG’s hopes of attracting $3.2 billion in private sector capital investment has been reduced to only $940 million, “most of which would be realized from the sale of OLG’s existing gaming assets,” said Lysyk.

The auditor also said part of the problem may be changing leadership at OLG, noting it has had five different board chairs and seven different CEOs since 2005, and is now reporting to the fifth cabinet minister to be responsible for the lottery agency.

“One wonders if stable leadership and governance could have benefited OLG and the gaming industry in Ontario,” wrote Lysyk. “In our opinion, the government and OLG did not do enough preparation and planning before launching an ambitious ’best-case scenario’ modernization plan.”

]]>http://news.nationalpost.com/news/canada/canadian-politics/auditor-calls-olgs-modernization-plan-too-ambitious-predicts-gaming-job-losses/feed1stdOntario Auditor General Bonnie Lysyk listens to questions on her special report on the Ontario Lottery and Gaming Corp.'s Modernization Plan during a news conference on it at the Ontario Legislature in Toronto on Monday, April 28, 2014.'Absolutely' Toronto should get a special casino deal, Ford says, while premier tells OLG the oppositehttp://news.nationalpost.com/toronto/no-special-deal-for-toronto-casino-wynne-tells-olg
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Premier Kathleen Wynne wants the Ontario Lottery and Gaming Corporation to rewrite its revenue-sharing formula for casinos so all municipalities are treated equally, prompting Mayor Rob Ford to counter that Toronto should get a special deal.

Mr. Ford wouldn’t specify how much he is prepared to accept as a hosting fee for a gaming and entertainment complex in the core, but Wednesday’s directive from Queen’s Park had some councillors spelling out what they want in exchange for a casino.

“If we don’t get $100-million, then the casino is dead in Toronto,” said Councillor Michael Thompson, one of several swing casino votes who pointed to the figure as a magic number.

“I’ve always believed that Toronto should be getting $100- million plus for permitting a casino in the city,” added Councillor David Shiner. “If the revenues are small, the chances are slim that Toronto’s ever going to support a casino.”

The comments came after Premier Kathleen Wynne called in the chair and CEO of the lottery corporation Wednesday to make it clear she doesn’t want to see Toronto treated differently to host a new casino.

OLG and the province have been pressed to explain how the gaming corporation could be promising a $50-million to $100-million hosting fee to Toronto if, under the existing formula, a casino in the core would reap roughly $20-million.

Ottawa Mayor Jim Watson threatened to kill plans for a facility in his city if he was not guaranteed the same terms as Toronto. A casino in downtown Toronto is estimated to bring in $1.4-billion in gaming revenue.

“To say that we’re the same as Hamilton or Ottawa is ridiculous,” Mayor Ford told reporters at city hall on Wednesday. “I think we should [get a special deal], absolutely,” he said. “You can’t compare us to the second largest city, which is Ottawa. We’re like three times the size, it might even be four.”

Mayor Ford rejected suggestions that the development from Queen’s Park is a death knell for casino plans in Toronto, noting that “a new funding formula doesn’t necessarily mean it’s going to be bad. We just have to review it.”

Even the vociferous casino critic Adam Vaughan said he expected the OLG to come up with a sliding scale formula that garners more revenue to a city that hosts more slot machines.

Following his meeting at Queen’s Park, OLG chairman Paul Godfrey said the corporation is going back to work on the formula to make sure that it’s the same for all municipalities. “The Premier indicated her desire to have the same formula and we listened to what she said,” he said. “We’re going to redo everything for all of the municipalities that have expressed an interest in hosting these types of gaming facilities in their communities.”

Mr. Godfrey denied there was ever a special deal for Toronto.

“I’m not here to discuss $50, or $100 [million] or anything else. We’ve been in discussions. Discussions do not mean that there has been anything engraved in stone,” said Mr. Godfrey, who is also president and CEO of Postmedia Network, parent company of the National Post.

Asked how the OLG planned to get Toronto city council on side, Mr. Godfrey, said “why don’t we wait and see what the new formula is going to be.”

Back at city hall, Councillor Paul Ainslie said there “are lot more red flags than there are green flags” for a casino, but Deputy Mayor Doug Holyday said it’s important for councillors to see specific, legally binding proposals before deciding whether to accept or reject a casino.

“We can’t make the final decision until we see them,” he said. “We want the best offer possible.” Councillors are awaiting a report from the city manager before the matter is discussed at city council.

]]>http://news.nationalpost.com/toronto/no-special-deal-for-toronto-casino-wynne-tells-olg/feed0stdRenderings released by MGM Resorts International and Cadillac Fairview, releaed on Wednesday, March 6, 2013, about what an integrated casino resort could look like at the Exhibition Place.Toronto’s gainhttp://news.nationalpost.com/modernizing-gaming/torontos-gain
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When any new business considers going into a community, it follows an extensive study process. The same is true when considering the placement of a new gaming facility. Not only must a casino be an economically viable business, it must also offer economic benefits to the community in which it will be built.

In Ontario, in the case of a casino, these benefits can range from direct payments by OLG to the host community, expansion of employment opportunities, new convention business and tourism, purchases from local vendors and suppliers, spinoff revenues to hotels, restaurants, and other entertainment venues and the significant economic job stimulus provided by building the entertainment gaming centre itself.

In March, OLG announced plans to locate an entertainment gaming centre in the Greater Toronto Area (GTA), an element of its plans to modernize its lottery and gambling business. Modernization will allow continuing revenue contribution to such Ontario government priorities as health and education. Currently, the OLG has a gaming and entertainment facility in the GTA — OLG Slots at Woodbine Racetrack, which has more than 750 employees.

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“To become more customer-focused, we need to locate our sites where customers want us to be,” says Rod Phillips, president and CEO of OLG.

However, the location of a GTA casino will depend as much on the host community’s enthusiasm for the project as on the plans to build it. In addition to Toronto, OLG has also signalled other potential locations in Markham, Vaughan and Mississauga.

“Customers in the GTA want facilities that are convenient for them. Our plan includes one additional gaming and entertainment centre in the GTA.”

“We will only put a casino in a community that welcomes it,” says Tony Bitonti, senior manager of media relations with OLG. “Part of our due diligence is ensuring the community is engaging in a public consultation process involving all stakeholders. That includes a discussion on everything from the availability of infrastructure, transit and parking access to the site, as well as the potential availability of hotels and new convention facilities. We also want to ensure that a casino and entertainment facility offers a net economic gain to the host community. The kind of facility OLG has in mind for the GTA would be designed to be part of the community and complement its surroundings.”

While OLG offered an assessment of the economic benefits of a Toronto casino, the City of Toronto commissioned accounting firm Ernst & Young in August to produce its own study.

The Ernst & Young study assumes an integrated entertainment complex built on up to 28 acres of land, including an 800-room hotel, convention meeting and exhibition space, retail and entertainment space and a casino gaming floor that covers only 10% of the complex.

The study estimates that a downtown casino would generate $2.5-billion to $3-billion in construction value, provide 6,000 construction-related jobs over a three-year period and provide 10,000 direct full-time net new jobs related to ongoing operations.

If the casino is ultimately located outside of Toronto, the study notes, the jobs and most of the economic benefits would flow to the new host community.

“We believe the conclusions of Toronto’s study very much reflect our own research,” says Mr. Bitonti. “It’s heartening to see a third-party economic analysis come to the similar conclusions as we did.”

The downtown Toronto casino proposal has significant support from industry stakeholders.

The members of Carpenters Union Local 27 in Ontario, for example, strongly support construction of an integrated resort-style casino complex.

“When our members are working the whole city benefits,” says Mike Yorke, president of the local. “But with this development, the benefits to the tourism and convention sectors are clear as well. The OLG proposal not only offers a positive plan for employment, it allows us to expand our vision about what the city can become. We believe this proposal deserves serious consideration by all Toronto residents.”

David Whitaker, president and CEO of Tourism Toronto, notes that almost 120,000 major convention delegates hosted in our city contributed more than $196-million in spending to the city last year.
However, cities across North America continue to vie for that business with new, improved and expanded convention facilities.

“The prospect of an integrated facility that supports the major renovation or construction of a new convention centre and host hotel has the potential of developing Toronto into a leading global convention and meetings destination,” he says.

An integrated complex could more than double the number of convention visitors generating millions in additional revenue. Convention delegates spend an average of $2,000 at hotels, restaurants, shops, entertainment venues and transportation.

“Successful destinations have to keep refreshing their products and service offerings,” Mr. Whitaker says. “The more choices we can provide visitors — especially high-value visitors who are seeking the kind of cosmopolitan and diverse destination for which Toronto has gained a reputation — the more opportunities there will be to compete for this lucrative customer whose spending power supports thousands of small businesses and jobs that make up the visitor economy. To not fully explore the full potential of this casino opportunity would be a missed chance that may never again materialize in a partnership of this magnitude.”

“Toronto has depended on the CN Tower for a very long time,” says Michael Beckley, senior vice-president, lodging development, Marriott Hotels and Resorts Canada. “While we’re seeing some new attractions in the city, Toronto needs something very big. A world-class entertainment destination complex that incorporates a casino can put Toronto on the map. We have experience in both the U.S. and Canada and, while casinos have their naysayers, we’ve experienced the positive economic benefits of similar developments. If the complex includes a hotel, in overall terms such a complex would grow the industry pie. Even if we only maintain our relative slice of the pie, we’re better off.”

Those efforts range from connecting players with one-on-one counselling services, to high-tech interventions that will discourage behaviours that might lead to problem gambling.

OLG is responsible for the province’s lotteries, casinos and slot facilities. Each year OLG sends approximately $40-million to the Ontario Ministry of Health and Long-Term Care to research, prevent and mitigate problem gambling.

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The Ministry funds free problem gambling counselling services at 52 centres across the province, and OLG partners with some of these centres to provide off-site registration for voluntary Self-Exclusion — a program offered to people who want to limit or stop their gambling.

One such counselling centre is Homewood Community Addiction Services in Guelph.

“Our problem gambling players come here voluntarily,” says Michelle Nogueira, problem gambling counsellor with Homewood. “Problem gambling speaks to a continuum of gambling behaviour. Awareness of their problem is half the battle, and action is the other half.”

Ms. Nogueira explains that some players want to abstain from all gambling, while others want to avoid particular games or cut back on overall levels of gambling.

Treatment can involve a broad range of therapies, and individual or group counselling. Some players receive short-term treatment. Others maintain contact with the office over years to prevent a relapse or cross-addiction.

“One of our success stories is a fellow in his mid-forties who was into high-stakes blackjack,” says Ms. Nogueira. “After a few slips, he hasn’t gambled for six years. He now has a wife and child, has earned trust and respect from his family and has been promoted at work.”

Homewood supports OLG’s voluntary exclusion program. Every fourth Friday, staff from nearby Flamboro Downs slots facility are available to enroll players into the program. OLG also has Responsible Gambling Resource Centres at all of its sites to help players determine whether their gambling is becoming a problem, or whether they might benefit from voluntary exclusion.

Registration in Self-Exclusion is available at gaming facilities and off-site locations where immediate support from a gambling counsellor is available. Visit knowyourlimit.ca and go to “Your Voice” for information.

Sustainability has become a hallmark of a successful business, and the Ontario Lottery and Gaming Corporation (OLG) is striving to apply this concept to its business model. OLG is working to reduce problem gambling while expanding its customer base to include a broader range of players who gamble regularly, but responsibly.

“With the modernization of lottery and gaming, there’s a strong overlap with responsible gambling,” says Paul Pellizzari, Director of Policy and Social Responsibility with OLG.

“We’re not interested in attracting a narrow base of players who spend too much money and have the potential of getting themselves into trouble. We’re looking to develop a broad base of players who can gamble in a healthy and moderate way over the course of their lives.”

Future support for game design will help to promote those goals. OLG is building a data analytics program, for example, that will analyze player behaviour.

Data from loyalty cards can help provide insights into player behaviour by tracking changes in gambling behaviour over time.

Using such a program will allow OLG to provide players with feedback on their gambling in a casino environment.

“On a slot machine of the future, for example, we will place time and money limits on play, feature a clock on the game screen and send direct messages to the player to remind them how much money they’ve spent or suggest it might be time to take a break,” says Mr. Pellizzari.

Mr. Pellizzari notes that the analytics tools don’t diagnose problem gambling—they simply identify behaviours that may be consistent with the early signs of problem gambling, before they become a problem.

“We seek to implement helpful methods that real-life research shows will habitualize safe play habits and help us maximize a sustainable gambling model,” he says.

OLG continues to apply research from independent experts and organizations to its responsible gambling program.

One organization is GamRes, which investigates and applies the psychology of gambling behaviour to develop responsible gambling tools. Collaborating with a network of gambling experts around the world, the organization brings the latest research to its clients.

“Canada and the Scandinavian countries are world leaders in willingness to develop and apply cutting-edge research into their responsible gambling operations,” says GamRes president, Dr. Richard Wood, a chartered psychologist who specializes in studying gaming behaviour.

“Research not only helps us to better treat problem gambling, it aids the design of responsible games. For example, it helps us to recognize and minimize potential game-related-risks for more vulnerable players, while still maintaining a healthy level of fun and excitement for all players.”

As part of its online Internet gaming offerings, OLG plans to offer direct access to GamTalk, a free online support service developed by Dr. Wood, to provide support to anyone who has gambling-related issues.

“GamTalk is a non-profit service that is sponsored by a number of provincial operators, including OLG, and it allows people to make use of a peer support group at any time,” Dr. Wood says. “It’s easy to access, particularly for those already involved in online gambling, and its anonymity reduces the stigma associated with seeking help for a gambling problem. In the future, online services are going to play a much larger role in problem gambling prevention and support.”

Customer access to counselling, online support and other programs are part of the criteria used by the Responsible Gambling Council (RGC), which has developed an exacting standard — RG Check — considered the world’s most rigorous third-party standard for gaming operators. RG Check is used to assess gaming facilities according to a scoring system involving eight standards and 46 criteria developed through years of evidence-based research.

“Our program recognizes that if you’re going to reduce the incidence of problem gambling, you can’t just focus on the behaviour of the gambler,” says Jon Kelly, CEO of the RGC. “You also need to address the practices of the industry.”

After a thorough on-site inspection, RG Check assessors provide gambling facilities with a score sheet and a series of recommendations.

Those facilities scoring beyond a certain threshold receive RG Check accreditation. Assessors look at criteria ranging from whether staff members have received, for example, training that OLG co-designs and delivers in conjunction with the Centre for Addiction and Mental Health in identifying and dealing with people who may show signs of problem gambling. RG Check also assesses how much information is provided to gamblers to help them make informed decisions.

Currently, four OLG properties have been accredited by RG Check, with all OLG sites slated for audit by 2014. All new operators in the province will require RG Check certification.

Paul Godfrey realizes not everyone is a gambler, but neither is everyone a fan of art, opera or sports. That doesn’t mean galleries, theatres and stadiums shouldn’t exist, he told a business crowd at The National Club Tuesday morning.

“I don’t believe you should say no to a casino just because you yourself are opposed to gambling,” said the chair of the Ontario Lottery and Gaming Corporation and president and CEO of Postmedia, which owns the National Post.

He spoke about the major benefits Toronto could reap from a casino, including thousands of construction and casino jobs, up to a billion dollars in hosting fees over 10 years and increased tourism.

“This isn’t just a casino or a slot box,” he said. “I firmly believe this is a tremendous opportunity for the city of Toronto, one with significant financial benefits.”

A casino would help Toronto become a convention destination and triple the city’s tourism traffic, he said. “I think we will truly open the doors to the world.”

As for criticism of a potential casino, he said communities generally have initial fears about increased crime.

“You see the polls that are taken that ask people, ‘Are you opposed to a casino in your neighbourhood?’ like one newspaper did. And a lot of people say ‘No not in my neighbourhood.’ And I gotta tell you, I wouldn’t want it in my neighbourhood, but at the same time you’re not putting it in a residential area. So the fact is that you ask the question again. Are you in favour of an entertainment facility that contains a casino that has convention facilities, restaurants, shopping areas and the like. You’ll find that the vote is very, very much different. So you get fooled by the question.”

I firmly believe this is a tremendous opportunity for the city of Toronto, one with significant financial benefits

As for gambling addiction, he said responsible gambling is one of OLG’s top priorities, and it works with the Centre for Addiction and Mental Health to train staff to keep an eye out for problem gamblers and direct these players to counselling and support services.

With or without a casino, gambling is often readily accessible to individuals in Ontario who can gamble online or take a free bus to a nearby facility, he said.

“Police chiefs tell us our facilities often help create safer communities,” he said, citing Windsor as an example.

However, he acknowledged that those who are in opposition are often more vocal.

“You’ve heard about the silent majority,” Mr. Godfrey said. “The silent majority sits quiet and they trust their elected representatives to make the decision for them. And sometimes, if only the vocal minority is heard, there are projects that get defeated.”

Although a final decision is likely months away, Mr. Godfrey already sees the casino adding a little something special to Toronto.

“It’s an extra jewel in our existing crown,” he said.

The city has begun the public consultation process and up until Jan. 25, the public will have an opportunity to voice their feedback online and verbally.

There are five public discussions scheduled this month, including one Wednesday at city hall at 6 p.m.

After a decade of decline, Brantford’s once-vibrant downtown core hit rock bottom in 1999. “The urban blight was a shock to see,” Leo Groarke, then dean of Wilfrid Laurier University’s small satellite campus in Brantford, told a local newspaper. “I had walked through slums in Toronto and Montreal but they were not as hopeless as the blocks of boarded-up buildings I saw [here].”

That same year, however, the Brantford casino opened its doors. Buoyed by the millions of dollars they began to receive annually from the Ontario Lottery and Gaming Corporation, which pays communities that host gaming centres a portion on slot and table revenues, municipal leaders invested heavily in post-secondary education and infrastructure projects designed to pump new life into their downtown core.

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The result can be seen in the renaissance of hockey superstar Wayne Gretzky’s hometown. Downtown Brantford now boasts four university and college campuses with more than 3,000 students. Some two dozen businesses – from professional firms and retail stores to the town’s first Mexican restaurant — have sprung up in storefronts that were shuttered just a decade ago.

“We have completely revitalized our downtown, 100%,” said Chris Friel, who was mayor of Brantford in 1999 and is back in office again today. “It’s easily now one of the most dynamic downtowns in all of Canada for investment and growth potential.”

Similar refrains are being heard in other Ontario municipalities that host or are adjacent to such OLG gaming facilities as resort casinos and charitable gaming and bingo centres.

In 2012, OLG contributed approximately $72-million to some two dozen communities as compensation based on five per cent of slot machine revenues from the first 450 machines and two per cent from each additional machine.

Like Brantford, many of those communities have invested their OLG proceeds into revitalization projects that have spurred local economic growth, helped improve and modernize key services and boosted their citizens’ quality of life.

Opened in March, 2011, the state-of-the-art facility offers comprehensive medical treatment and diagnostic services to the 115,000 people who live in the region or area.

According to Sault Ste. Marie Mayor Debbie Amaroso, the positive impact that the new building has had on patients and on physician recruitment, together with the savings that have resulted from its replacement of two aging and inefficient facilities, have made the new hospital a godsend for her city.

“To be able to have that in our community, the construction jobs that we were able to generate, the maintenance and all the things that go along with that [and] the contractors who provide services to the hospital – that’s all part of [the OLG] contribution,” she said. “And it didn’t affect our tax base. Our taxpayers didn’t have to pick up the tab for [the city’s share of] $13-million.”

The compensation paid to municipalities isn’t the only support OLG provides to local economies – not by a long shot.

Lottery and gaming proceeds from OLG operations totalled for 2012, was roughly $1.9-billion and helped to fund a myriad of projects and initiatives that are helping to improve the lives of people across Ontario. Notably, $1.7-billion went to hospitals, health-related programs and other provincial priorities like health care and education. Another $120-million was used to help local and provincial charities and not-for-profit organizations. A further $10-million went to support amateur athletes through the province’s Quest for Gold program.

Local economies were also supported in 2012 in the amount of $1.7-billion. In addition to the $112-million it paid to municipalities, OLG purchased $62-million in goods and services from Ontario businesses and paid some $950 million in wages and benefits to roughly 18,000 employees. It also made payments of $347-million to the province’s horse racing industry and $222-million in commissions to lottery retailers.

OLG also sponsored community festivals, cultural events and local charities, and has funded over $360 million to the province’s problem gambling research, education, prevention and treatment initiatives. “It’s been an immense relationship, based not only on the financial aspects of it, but more importantly on growing and making sure that our city is a very dynamic city [that is] inclusive, diverse.”

The mayor of Hamilton shares that view in regards to his city’s relationship with OLG and the compensation it has received from slots at Flamboro Downs.

“It’s a clean, well-run operation [that] reflects well on the city,” said Bob Bratina. “And with the jobs that are provided, the general activity as well as the business relationship between the city and OLG, I would have to say it’s been a win-win situation since the very beginning.”

Brantford’s Friel agrees. Though initially opposed to the casino when it opened, out of fears that it could lead to increased crime, Friel makes no bones about the overwhelmingly positive impact that the OLG-supplied investments have had on his community.

“It’s exceeded our expectations,” the mayor said. “The dollars that we have been investing to see those buildings and the campuses grow, in our urban core, have come directly from the casino.”

Giacomo (Jake) Pastore has seen the many social benefits that gaming facilities can have on Ontario communities first hand.

As an economic development officer with Sault Ste. Marie in the 1980s and ’90s, he watched towns with casinos just across the Canada-U.S. border in Michigan flourish while his city floundered.

“They were getting all the financial benefits with none of the social and policing problems that people always used to associate with casinos,” said Pastore.

That’s why he was elated when the Sault was one of the first four Ontario municipalities to be granted a charity casino in 1999.

“It was like we’d won a bid to be an Olympic host city,” said Pastore, who later joined OLG as manager of community and municipal relations.

He now spends much of his time driving across Ontario to cultivate relations with municipal leaders, often in the company of Rod Phillips, OLG’s president and chief executive officer.

“I knew that having a casino would be a huge boost for my city. It’s been all of that – and more.”

He added that, in the 13 years he’s worked for OLG, he’s learned to fully appreciate the many economic and social advantages that gaming facilities bring to communities.

“It goes way over and above the money we give back and the investments we make as sponsors,” he said. “OLG is a good corporate citizen that works hard to build and maintain positive and constructive relationships with every community and group it deals with.”

Catering to changing customer preferences and taking advantage of new technologies are among the reasons OLG plans to transform Ontario’s lottery and gaming industry. But there is also a strong economic case to be made for replacing outdated operations with next- generation strategies, and it’s important to understand what’s at stake in revamping lottery kiosks and crowded slot facilities.

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Here are the numbers, including the contributions the OLG makes to the province, shifts in gambling industry profit margins and what the future holds for potential revenue generation.

7,700 Number of people the OLG directly employs across Ontario.17,700 Number of people indirectly employed by Ontario in gaming resorts.10,000 Number of independent lottery retailers in Ontario.4 Number of resort casinos in Ontario.8-million Number of Ontario adults who played the lottery at least once last year.2,7-million Number of Ontario adults who visited gaming sites.$2-billion (approx.) Net profit the OLG contributes to the province.$36-billion (approx.) Amount OLG and its predecessor organizations have provided to the province since 1975.$1-billion Funds that, without modernization, will be just to maintain the OLG’s existing infrastructure.$3-billion Potential private sector capital investment for new sites across the province.$3.7-billion Total economic activity OLG generated in 2010-2011 in Ontario.$400-million Estimated amount spent annually in Ontario at offshore Internet gaming sites not regulated by the province.74 Decline in the percentage of U.S. residents entering Windsor between 1998 and 2008.14 Percentage of adults under 45 who play the lottery at least once a week.$149 Amount the OLG returns to the province for each resident of Ontario.$220 Average amount all Canadian lottery and gaming return to every resident of Canada.10 Number of years it’s taken for profits from gaming facilities close to the U.S. border to drop from $800-million to $100-million.$4.6-billion Additional amount the OLG would contribute over the next six years to services such as health care and education when its modernization plan is complete.6,000 Estimated number of new construction jobs for a Toronto casino and entertainment complex.12,000 Estimated number of new well-paying private sector jobs at a Toronto casino and entertainment complex.

Toronto will lose out on a “once-in-a-generation” opportunity if it rejects building a new casino and entertainment complex in the city core, OLG chair Paul Godfrey warned Friday.

His pitch to the Toronto Board of Trade comes three weeks before East York holds a public forum about the possibility of a downtown casino, and two months before the city’s executive committee debates the issue, which has generated stiff opposition among some residents and councillors.

“This is a one-time opportunity,” Mr. Godfrey said. “It’s not like the Grey Cup game where you play it every year. It’s not like the Santa Claus parade that you have once every year. If they vote no on it, and the people of Toronto have given them the right… We’ll be building it somewhere else.”

The Ontario Lottery and Gaming Corporation in March announced plans to build a new casino in Greater Toronto as part of a package of sweeping reforms to the province’s gambling industry. Though 33 other municipalities have since expressed interest, Mr. Godfrey says downtown Toronto is OLG’s first choice.

He estimates a downtown casino and entertainment centre could create 12,000 jobs and generate more than $2-billion in capital investments in the city. Less than 10% of the facility’s square footage would be table games and slots, Mr. Godfrey noted, with other portions devoted to retail, hospitality, entertainment and convention space.

“If it’s not in Toronto, it will be somewhere else — in Markham, in Richmond Hill, in Vaughan, in Mississauga — and it won’t be as iconic, it will not produce the number of jobs, it will not produce the economic growth, it will not give you the tourism,” Mr. Godfrey said. The OLG will not impose a casino on an unreceptive city, he added.

“This is the one shot to make it happen, [but] we are only going to do so in a community that welcomes us.”

A spokesman for Rob Ford said the mayor would “support anything that’s a fair deal for taxpayers,” but the casino proposal has its share of council critics, including Adam Vaughan, whose downtown ward encompasses a possible site.

Mr. Vaughan, who argues the social costs of a casino would outweigh any gambling windfall, also questioned the OLG’s job projections: “They are wildly fantastic numbers, and I don’t believe them, and unless he’s prepared to release his economic studies for peer review, they’re just promises made by someone who’s having trouble convincing people a casino’s a good idea.”

OLG plans to issue a request for proposals in the coming months, with a decision on location expected next year. Possible sites in downtown Toronto include Exhibition Place, the Metro Toronto Convention Centre and the Port Lands. Gambling giant MGM has indicated its interest in building a casino in the GTA is contingent on a downtown waterfront location.

Board of Trade president Carol Wilding says members of her organization hold differing opinions on the casino proposal, with the board aiming to develop a set of criteria to help “guide” decision makers.

“This is not a simple proposition and there are no simple answers,” Ms. Wilding said.

Businessman Mark McEwan, who owns a string of restaurants in downtown Toronto, welcomed the concept of a local casino and entertainment complex, saying it would spur spinoff benefits for area businesses and provide a much-needed “shot in the arm” for Toronto.

“To say no to $3-billion to 4-billion in investment in our core would be probably one of the biggest mistakes we ever make,” Mr. McEwan said.

Mr. Godfrey is also the president and CEO of Postmedia Network Inc., the parent company of the National Post.

A new casino is on track for Greater Toronto after the province formally approved a slate of sweeping reforms to Ontario’s gambling industry.

In the face of declining profits and burgeoning infrastructure costs, the Ontario Lottery and Gaming Corporation on Monday announced plans to expand lotto sales at big-box retailers, transfer jobs to the private sector and close or move facilities that are underperforming. The centrepiece GTA casino is expected to bring in close to half of the anticipated $1.3-billion in new annual net profits by 2017.

OLG chairman Paul Godfrey called the changes “the most significant transformation of a Crown agency ever seen in Ontario,” citing a need to realign the industry with 21st-century realities.

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“Doing nothing is simply not an option,” Mr. Godfrey said. “Doing nothing means our contribution to the province will continue to erode, potentially by hundreds of millions of dollars per year.”

The reforms, outlined in a report entitled Modernizing Lottery and Gaming in Ontario, would create about 2,300 net new industry jobs and 4,000 service-sector jobs, according to OLG projections. The corporation cited a host of motivators, including the rise of offshore gambling websites and steeply plunging profits at Canada-U.S. border gaming sites.

OLG, which contributes just under $2-billion a year to the Ontario government to support areas such as health and education, said without the planned reforms, it would have to spend $1-billion simply to update its existing services. The modernization strategy, conversely, could draw billions of dollars in private capital investment.

“The current business plan is based on assumptions that are more than 20 years old,” Finance Minister Dwight Duncan said. “No corporation, let alone one that provides so much support to our schools and health care, should be expected to operate under such an outdated strategy.”

Highlights of the new plan include introducing multilane lottery sales at large retail outlets such as supermarkets and big-box stores, identifying distinct zones where existing or new gaming sites would be permitted, expanding slot facilities beyond horseracing tracks and boosting research and treatment support for problem gambling.

OLG will also move 6,000 gaming positions to privatesector operators, taking the number of gaming employees in the private sector to 100% from the current 60%. While OLG would maintain control and oversight over the business, regulated private-sector providers would be responsible for funding, building or improving sites.

No decision has been made on where to locate the new GTA casino, which is still subject to an OLG business case and municipal approval. Some have speculated it could end up at Ontario Place, which is undergoing a revitalization, but councillors are divided over whether they want a casino in Toronto.

“I’m not really a big casino supporter; however, if one was to happen, I’d just want to make sure the money went toward subways,” Deputy Mayor Doug Holyday said.

Councillor Adam Vaughan said the municipal revenue share from a casino would not be enough to fund a massive, multibillion-dollar subway project, and raised concerns about increased social costs.

“When you build an urban casino, you’re doing it to maximize gambling opportunities, not to create tourism,” he said.

Mayors in various other GTA municipalities were hesitant to weigh in on whether they would want a casino, saying any decision would have to come after extensive consultation with residents, but OLG president Rod Phillips said more than two dozen communities have expressed interest. Though the OLG left the door open to building new casinos in other areas of the province, the GTA casino is expected to be up and running within five to six years.

Rosario Marchese, the NDP critic for GTA issues, accused the government of attempting “to balance the budget on the backs of desperate families who want to try to become millionaires.”

Wherever the new casino ends up, it is expected to sap some business from other Ontario gaming sites accustomed to serving busloads of GTA visitors. But Casino Rama spokeswoman Jenna Hunter said she was not concerned: “We’re very confident in our customers and in our staff, and we’ll meet any challenges that come along.”

National Post

Note: Paul Godfrey is also the President and CEO of Postmedia Network, the parent company of the National Post

]]>http://news.nationalpost.com/news/canada/new-olg-report-calls-for-massive-changes-to-ontarios-gambling-industry/feed7stdPaul GodfreyRod Phillips to take over at OLGhttp://news.nationalpost.com/news/rod-phillips-to-take-over-at-olg
http://news.nationalpost.com/news/rod-phillips-to-take-over-at-olg#commentsFri, 20 May 2011 00:25:10 +0000http://news.nationalpost.com/?p=65844

TORONTO — The Ontario Lottery and Gaming Corp. announced Thursday the appointment of Rod Phillips as its new president and chief executive officer.

Phillips, who worked as chief of staff to former Toronto mayor Mel Lastman and more recently as president of Shepell-FGI, an employee assistance company, will take over the post on June 10.

Paul Godfrey, chairman of the OLG board of directors, introduced Phillips to reporters Thursday, noting his “great business acumen” and experience in both the public and private sectors.

“The board is confident Rod is the right leader to continue our efforts toward improving performance, efficiency and cutting costs,” said Godfrey, who is also president and chief executive officer of Postmedia Network, which owns the National Post.

Phillips will join an executive team whose numbers have shrunk to seven from 10.

The OLG currently generates about $7 billion annually in revenue and sends $2 billion a year to the province. Phillips has been tasked with cutting organization costs, which an OLG news release said would enable greater investments in Ontario’s hospitals, schools, charities and amateur sports.

“There’s a government-set objective with regards to savings and it’s a target of $200 million,” Phillips said. He did not elaborate on where the savings would be found.

Phillips said one of his first items of business will be to set the OLG’s policy course and agenda with the board of directors and to meet with stakeholders.

“The challenge in the public sector is to operate with one foot in each area; to grow like a business and act like a corporation, but to understand and take direction from the shareholders of Ontario,” Phillips said.

OLG employs 18,000 people in 34 locations across Ontario including resorts, slots and corporate and gaming facilities. Since 1975, it has generated more than $32 billion for the province.

TORONTO — Nine Bell call centre employees filed a lawsuit on Friday against 19 of their coworkers seeking a cut of the $50-million Lotto Max jackpot they won last month.

The lawsuit, filed on behalf of the nine by lawyer Marek Tufman, claims the 28 employees had all been a part of the same lottery pool at their Toronto office until the 19 split from the group without telling the others.

The splinter group purchased a ticket on New Year’s Eve that ended up netting them the $50 million, but the winners only collected a portion of the winnings — about $1.6 million each — this week after anOntario Lottery and Gaming Corp. investigation identified an additional 11 workers who also may be entitled to the prize.

The remaining money is being held by Ontario courts while they wait for the matter to resolve itself.

Nine of those 11 workers are listed as plaintiffs in the statement of claim filed in Toronto on Friday. They are seeking their share of the winnings as well as money for a breach of contract.

SaulGlober, the lawyer for the 19, said earlier this week he’s confident his clients will get to keep their full shares of the jackpot.

Earlier this month, workers with Bombardier in north Toronto were also told by the OLG that their $50-million jackpot payout will be delayed due to additional claimants.

In December, four employees in Barrie, Ont., received a $4-million settlement after launching a lawsuit for being omitted from a lottery office pool nearly three years ago.

In that case, OLG officials were unable to determine the rightful owners of the ticket, and left the prize money to the Ontario courts to sort out.

Each of Monday’s claimants takes home a $1.66-million share for now, representing $31.7-million of the total, while more than $18-million will be held back until a court can decide on claims from nine other workers.

“I was very happy that these legitimate holders of the winning ticket are able to collect at least a portion,” said Saul Glober, lawyer for the group of 19.

He said he doesn’t know why the other employees are claiming a stake in the prize.

“We’re quite confident that these 19 are the only legitimate owners of that ticket and there’s no evidence that I’m aware of to the contrary,” said Mr. Glober.

Marek Tufman, lawyer for the second group, does not dispute the winnings of the 19 who claimed their prizes Monday, but he said others should also get a share. “There is a claim that the entire group was in partnership.”

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Natalie Damianidis, one of Monday’s winners, ran the group’s lottery pool and said she kept an organized record of office players.

“I had my book, it was on my desk, it was there for everybody to see,” said Ms. Damianidis. “I personally think that I did everything by the book.”

Rula Sharkawi, vice-president of corporate affairs and communications for the Ontario Lottery and Gaming Corporation, said the group of 19 was “very well-documented.”

But disputes over group lottery wins are not unusual. The OLG offers group play forms and suggests other ways of leaving a paper trail to avoid competing claims.

Last month, another $50-million jackpot won by a pool of 24 workers at Bombardier was disputed. The winnings have been put on hold while OLG investigates claims from other workers.

For Monday’s winners, it’s now just a question of how much they will get.

“It’s a dream, it’s a 100% dream. It’s been a month and we’re all still pinching ourselves,” said Frances Cowa. She and her co-winners arrived for the prize ceremony fresh from sipping mimosas in a limousine.

Many of them wore key-shaped pendants around their necks, symbolizing their new financial freedom.

“All 19 of us, we’re united and we’re sticking together. They are our keys of freedom,” said Ms. Cowan. She said her share will be used to help her family and she spilled the beans on a new car for her father.

“I’m elated, this makes for a very happy Valentine’s Day,” said Christine Hellstrom. Asked about her Valentine’s Day gift spending, she said, “I’ll be as cheap this year as I was last year.”

“It’s a lot of financial freedom,” added Gary Morrison, one of only two men in the group.

“My family is well off now. We’re set. I don’t have to worry about anything.”

Donna Antoniadis plans to invest the money and pay off her debts. “I hear so many times people win a couple million and they blow it.”

Despite everything that has happened over the last month, she does not regret playing as a group instead of on her own.

“I’m not greedy. I’m just glad I’m part of it.”

None of the 19 have decided to leave their jobs so far and will be returning to business as usual at Bell. The winners said they don’t expect tension when they see their coworkers who are claiming the remaining shares.

“Its been business as usual,” said Ms. Hellstrom. “They’re all adults and I think they understand that stuff happens.”